A Fort Collins-based alternative-energy startup announced Tuesday it has secured $10.5 million in first-round funding and plans to build a biofuels plant in southwestern Colorado.

Solix Biofuels, which has technology that turns algae into oil for refineries, will build a pilot plant on a 10-acre site on the Southern Ute Indian Reservation near Durango.

The Southern Ute Tribe is among Solix’s first-round investors, which include London-based I2BF Venture Capital and San Antonio-based Valero Energy Corp.

“(The Southern Utes) are very interested in being a large-scale producer, and being located on their facility gives us the ability to grow out into large-scale production,” Solix chief executive Doug Henston said.

The plant will be built in two phases, and the first phase will include a 1-acre lab and 4 acres of so-called photo bioreactors for growing algae.

It is expected to be in operation in the second quarter of 2009. The second phase will include a 5-acre expansion for full-scale production.

“We believe algae has great promise as a source of efficient, cost-effective commercial-scale biofuels production,” said Rebecca Kauffman, president of Southern Ute Alternative Energy, in a news release.

Solix said it has a tentative agreement for an additional $5 million in funding.

Colorado is “leading a renewable-energy revolution thanks to innovative and forward-thinking companies like Solix,” Colorado Gov. Bill Ritter said in the news release.

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